Buying 'Tax Losses'
Discussion
Hey all,
Over the years, I've often heard people speaking about buying companies who have 'tax losses' on their books which can be carried forward.
I haven't heard too much about this apart from occasional conversations and curious about these. Is there a market for these kind of companies? What is the value for each £1 of losses which have been incurred. Legal to do?
Curiosity if anything and a Google search doesn't bring up much. Anyone enlightened on these?
Over the years, I've often heard people speaking about buying companies who have 'tax losses' on their books which can be carried forward.
I haven't heard too much about this apart from occasional conversations and curious about these. Is there a market for these kind of companies? What is the value for each £1 of losses which have been incurred. Legal to do?
Curiosity if anything and a Google search doesn't bring up much. Anyone enlightened on these?
Trading losses can be carried forward by a business for offset against future profits "from the same trade".
When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
Eric Mc said:
Trading losses can be carried forward by a business for offset against future profits "from the same trade".
When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
This may help: https://www.cronertaxwise.com/community/my-vip-tax...When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
Eric Mc said:
Trading losses can be carried forward by a business for offset against future profits "from the same trade".
When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
Not sure where you get your last para from. If the trade remains the same the change of ownership dosent trigger any restriction. When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
I have advised clients on many occasions on using losses in an acquired company.
db10 said:
Eric Mc said:
Trading losses can be carried forward by a business for offset against future profits "from the same trade".
When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
Not sure where you get your last para from. If the trade remains the same the change of ownership dosent trigger any restriction. When a business is purchased by a new owner, it is generally considered that the old trade has ceased and a new trade has begun. That means the old losses cannot be offset in future years as the old trade has ceased.
I have advised clients on many occasions on using losses in an acquired company.
Where shares are sold, a change in ownership doesn’t result in forfeiture of losses so long as the nature or conduct of the trade does not change within prescribed periods.
Gassing Station | Business | Top of Page | What's New | My Stuff